Using a slightly modified IPCC method, we examined changes in annual fluxes Of CO2 and contributions of energy consumption, limestone use, waste combustion, land-use change, and forest growth to the fluxes in South Korea from 1990 to 1997. Our method required less data and resulted in a. larger estimate Of CO2 released by industrial processes, comparing with the original IPCC guideline. However, net CO2 emission is not substantially different from the estimates of IPCC and modified methods. Net CO2 emission is intimately related to GDP as Korean economy has heavily relied on energy consumption and industrial activities, which are major sources Of CO2. Total efflux Of CO2 was estimated to be 63.6 Tg C/a in 1990 and amounted to 112.9 Tg C/a in 1997. Land-use change contributed to annual budget Of CO2 in a relatively small portion. Carbon dioxide was sequestered by forest biomass at the rate of 6.5 Tg C/a in 1990 and 8.5 Tg C/a in 1997. Although CO2 storage in the forests increased, the sink effect was overwhelmed by extensive energy consumption, suggesting that energy-saving strategies will be more effective in reducing CO2 emission in Korea than any other practices. It is presumed that plant uptake Of CO2 is underestimated as carbon contained in plant cletritus and belowground living biomass were not fully considered. Furthermore, the soil organic carbon stored in forest decomposes in various ways in rugged mountains depending on their conditions, such as slope, aspect and elevation, which could have an effect on decomposition rate and carbon stores in soils. Thus, carbon sequestration of forests deserves further aftention.